Answers / Financial Due Diligence
What is a Vendor Due Diligence (VDD) report and how is it different?
An advanced Financial Due Diligence question — expect it in final rounds and case-heavy interviews (IB, PE, Big-4 Transaction Services).
THE SHORT ANSWER
VDD is sell-side FDD shared with all bidders. Key differences: (1) Narrative tone – tells the business story positively. (2) Longer (60–80 pages) with market context. (3) Adjustments tend to be more aggressive (seller-friendly). (4) Commissioned 6–10 weeks before going to market. (5) Used to accelerate the process by pre-answering buyer questions. Buyers still perform confirmatory DD to validate VDD findings.
WHAT INTERVIEWERS LISTEN FOR
- ✓Sell-side financial due diligence
- ✓Narrative tone tells positive story
- ✓Longer with market context
- ✓Seller-friendly adjustments
- ✓Pre-answers buyer questions
COMMON MISTAKES
- ✗Confusing VDD with buyer-side DD
- ✗Thinking VDD replaces buyer DD
- ✗Assuming VDD is unbiased
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